Attorney General, Richard Blumenthal

Connecticut Funeral Home Investigation

A Consumer Guide to the Prices, Practices, and Regulations of the Funeral Industry

Attorney General Richard Blumenthal and Connecticut Public Interest Research Group

March, 1997

Connecticut Funeral Home Investigation

A Consumer Guide to the Prices, Practices, and Regulations of the Funeral Industry

The average funeral in Connecticut costs $6,000. Consumers can now choose from a wide variety of goods and services when making funeral arrangements, but the uniqueness of the funeral industry poses many challenges to the consumer concerned about cost. Existing regulations provide access to some of the information consumers need to make informed decisions, but this investigation reveals a need for strengthened regulations and recommends that consumers become more funeral-savvy.

Part II

Few of us wish to ponder our deaths. Fewer still, perhaps, are eager to enter the morass of decisions concerning caskets, cemetery plots, memorial ceremonies, finances, etc. However, the selection and purchase of these goods and services are things many will do and all someday will require.

Jessica Mitford’s 1963 analysis of the funeral industry in The American Way of Death first broke this taboo. Her book sparked a reform movement to protect consumers from funeral home directors’ fraudulent practices.

Today, consumers have many tools available to them to prevent being misled. With funerals in Connecticut costing an average of $6,000, it is important that consumers understand these protections and their limitations before making such a large purchase.

The Connecticut Funeral Home Investigation describes the goods and services available at most funeral homes and advises consumers on how to avoid excessive funeral costs. This investigation also recommends regulatory reforms to further protect consumers.

Part I

Gone are the days when funeral homes offered a single, standard package of funeral goods and services at a single price. As reforms were implemented and cremation became more common, funeral homes broadened their array of funeral options.

Today, consumers can choose from the varied professional services, facilities, transportation, and merchandise that funeral homes offer to select the funeral arrangements they desire. These goods and services usually are presented to consumers in the categories below. Consumers should make note of the redundancy between some categories to avoid paying for duplicate services.

Professional Services

Basic Services of Funeral Director and Staff. For ceremonies with the remains present, the consumer will be assessed a fee for the basic services provided by the funeral home. This fee includes consultation with the consumer to select the arrangements, securing any permits necessary, coordinating services with the cemetery or crematory and clergy, and a proportionate amount of the funeral home's overhead expenses. Embalming, other preparation of the remains, facilities and staff for any ceremonies, transportation, merchandise, and cash advance items selected are additional costs.

Embalming. Embalming is a procedure that temporarily preserves the remains. The Connecticut Public Health Code requires embalming under certain circumstances, such as when the remains are to be forwarded to another funeral home by air. However, it usually is a practical necessity if the remains are held longer than 48 hours or an open casket ceremony is planned.

Washing and Disinfecting. Unembalmed remains will be washed and disinfected. This is required for ceremonies with the body present.

Dressing and Casketing. The remains will be dressed in clothing provided by the consumer or purchased separately and placed in the selected casket. While included in the cost of other professional services, this is an itemized expense added to the cost of the basic services provided for ceremonies with the remains present.

Cosmetology. Hairdressing. Restoration. Whether embalmed or unembalmed, cosmetology and hairdressing may be elected for ceremonies with an open casket. Reconstructive cosmetology, or restoration, also is provided, usually at an hourly rate.

Special Care for Autopsied Remains. Autopsied remains are classified as medical hazardous waste. This mandatory fee covers the funeral home’s cost of their appropriate disposal.

Immediate Burial. Immediate burial is the interment of uncremated remains in a suitable container in a grave or crypt when no ceremonies with the body present are conducted. The cost of immediate burial includes securing any necessary permits, coordinating services with the cemetery, a proportionate amount of the funeral home’s overhead expenses, transferring the remains to the funeral home, and transportation to the cemetery. A burial container, cash advance items, and memorial ceremonies are additional costs.

Direct Cremation. Direct cremation is the reduction of the remains to ashes by intense heat when no ceremonies with the body present are conducted. Connecticut state law requires that remains be held 48 hours before cremation. The cost of direct cremation includes securing any necessary permits, coordinating services with the crematory, a proportionate amount of the funeral home’s overhead expenses, transferring the remains to the funeral home, transportation to the crematory, and return of the cremated remains to the next of kin. A cremation container, cash advance items, memorial ceremonies, and crematory charges are additional costs.

Receiving Remains from Another Funeral Home. In some circumstances, the remains may be transferred from the funeral home that first received the remains to another for ceremonies with the body present or burial. The cost of this service includes securing any necessary permits, local transfer of the remains to the funeral home, coordinating services with the cemetery or crematory, transportation to the cemetery or crematory, and a proportionate amount of the funeral home’s overhead expenses. A container, cash advance items, ceremony service charges, crematory charges, and transfer of the remains from the airport are additional costs.

Forwarding Remains to Another Funeral Home. Likewise, in other circumstances, the remains may first be received by one funeral home for preparation to be transferred to another. The cost of this service includes securing any necessary permits, transferring the remains to the funeral home, embalming or transfer of the remains to the crematory, coordinating services with the other funeral home, transfer of the remains to another local funeral home or airport, and a proportionate amount of the funeral home’s overhead expenses. A container, cash advance items, any ceremonies conducted by this funeral home, crematory charges, and common carrier shipping charges are additional costs.

Facilities and Staff

Refrigeration. Refrigeration cools the remains to temporarily preserve them. In the short term, it may be a less costly alternative to embalming. The cost of refrigeration is sometimes an itemized expense added to the cost of professional services.

Sheltering. Sheltering is simply holding the remains from the time of death to the time of burial. The cost of sheltering is sometimes an itemized expense added to the cost of professional services.

Visitation. The services provided for a visitation or viewing include set-up of the viewing area, placement of the encased remains, parking arrangements, and staff to supervise the event. If held at the funeral home, it also includes the use of the facility. If held elsewhere, it includes the cost of local transfer of the remains, but the use of that facility is an additional cost.

Funeral Ceremony. Funeral ceremony services include set-up, placement of the encased remains, parking arrangements, staff to supervise the ceremony, and coordinating the arrangements with clergy or others. As with a visitation, if held at the funeral home, it also includes the use of the facility. If held elsewhere, it includes the cost of local transfer of the remains, but the use of that facility is an additional cost.

Memorial Service. Memorial services include set-up, parking arrangements, staff to supervise the service, and coordinating the arrangements with clergy or others. As with the other ceremonies, if held at the funeral home, it also includes the use of the facility. If held elsewhere, the use of that facility is an additional cost.

Graveside Service. Graveside ceremony services include staff to supervise the service and coordinating the arrangements with clergy and the cemetery.

Transportation

Removal (Transfer of the remains to the funeral home). Transfer to the Crematory. Transfer to or from the Airport. Transfer of the remains from one location to another, while included in the cost of most professional services, are itemized expenses added to the cost of the basic services provided for ceremonies with the remains present.

Funeral Coach or Hearse. The use of a ceremonial hearse to transfer the remains to the cemetery for a graveside ceremony is an itemized expense added to the cost of the basic services provided for ceremonies with the remains present.

Limousines. “Processional Lead Car.” “Flower Transportation.” The use of vehicles to transport family, pall bearers, clergy, and floral arrangements to the cemetery for a graveside ceremony are itemized expenses added to the cost of the basic services provided for ceremonies with the remains present.

Utility Vehicle. The use of a vehicle to procure authorizations and cash advance items is sometimes an itemized expense added to the cost of professional services.

Additional Mileage. A per mile fee usually is assessed for transportation outside a local service radius, as defined by the funeral home.

Merchandise

Many items may be supplied by the consumer and are not required to be purchased from the funeral home. Funeral homes offer merchandise as a convenience to the consumer, although they usually also profit from the sale. In all cases, the funeral home simply acts as a vendor, making no warranties or representations concerning the products. The merchandise varies between funeral homes. Many offer register books, acknowledgment cards, prayer cards, and burial clothing. Some other common items include:

Caskets. Caskets may be made of cardboard, particle board, soft or hard woods, and steel or other metals. Their interiors may use crepe or satin. Thus, their cost has a wide range.

Vaults or Outer Burial Containers. Many cemeteries require casketed remains to be buried in a cement container since sunken graves add to their maintenance costs. Like caskets, vaults may be very plain or extremely ornate, and so their cost also has a wide range.

Extra Sealant. Additional sealant may be applied to the casket or vault to slightly delay the inevitable decomposition of the remains.

Cremation Urns. Cremated remains will be returned to the family in a wooden or plastic box, but urns may be purchased at a wide range of prices representing the simple to the ornate.

Outside Shipping Container. When the remains are transported long distances by a common carrier, a container in addition to the casket is required.

Cash Advance Items

Goods and services not offered directly by the funeral home but charged to the consumer are referred to as cash advance items by the industry. Examples include common carrier shipping charges, newspaper death notices or obituaries, flowers, clergy, cemetery plots, grave opening, grave markers, medical examiner, death certificates, and crematory charges.Similar to the sale of merchandise, the funeral home offers its assistance in making these arrangements as a convenience to the consumer. In most cases, the consumer not only pays the funeral home for the cash it advanced to purchase these goods and services but also pays a fee for the funeral home’s assistance. The fee for such assistance is included in the cost of the professional services offered by the funeral home, regardless of what purchases the consumer may make without the funeral home’s assistance.

By nature, the funeral industry enjoys a guaranteed demand for its goods and services, and through tradition and industry practice, it enjoys limited competition. Also, consumers often select and purchase their goods and services at a very emotional time. These characteristics grant the industry a unique advantage over consumers.

Death always has been a very local event. The goods and services associated with interment or cremation of the decedent continue to be provided most conveniently locally, even when required infrequently in low populated areas.

This situation is analogous to the health care industry. Demand is low in many poorly populated areas. However, there is a constant demand for the full range of goods and services available because the consumer’s time of need is unpredictable. The high overhead costs of maintaining a facility and staff able to offer the full complement of goods and services are not matched by the low, albeit constant, demand for them. In these cases, rural hospitals and clinics often are subsidized by local and state governments.

The funeral industry enjoys no such subsidies but rather has been very successful in limiting competition. The industry assembled itself into trade associations many years ago. It lobbied states to create licensing boards that would limit new entry into the funeral home market. Funeral homes catered to specific populations, often based on religion, to avoid competition within urban areas.

Thus, the free market competition that drives prices down as businesses woo consumers does not apply to the funeral industry. As a result, funeral homes are able to charge higher prices for the goods and services they offer then if the market were competitive. As growing numbers of funeral homes are purchased by large corporations which lower overhead costs through centralization of many services, the existing limited competition allows the funeral homes to maintain their prices margins.

In addition, many consumers do not make arrangements in advance and are left to purchase funeral goods and services at an emotional time. The consumer being toured through a casket showroom usually is not as wary as when toured through a car showroom, although the sales techniques to convince the consumer to purchase a high end model are the same. The consumer has only a few days to become familiar with the many goods and services available, to ask questions, and to consider alternatives.

The unscrupulous funeral home director could take advantage of the consumer’s vulnerability at this time. Inexpensive caskets may be displayed in an ugly color. A particular package of high end goods and services may be offered so the consumer buys items that are not needed or desired. The director may imply that anything less than the best would be disrespectful to the decedent’s memory.

The Federal Trade Commission (FTC) is charged with correcting any imbalance of bargaining power between consumers and service providers. As described above, the funeral home industry enjoys an advantage over consumers. Thus, the Federal Trade Commission first proposed a trade rule on funeral practices in 1975. Due to the industry opposition, the regulation was not adopted until 1982 and included a 2 year grace period.

The FTC’s Funeral Rule is the consumer’s first, and in many states, only line of defense. Its provisions require funeral homes to make the following disclosures:

When consumers call funeral homes to inquire about the goods and services offered, the staff must disclose that prices are available over the telephone and then provide them as requested.

When consumers inquire in person, the funeral home must provide a general price list describing the cost of each good and service available.

The consumer must be informed that embalming is required by law only in certain circumstances and that direct cremation or immediate burial are options that do not require embalming.

The funeral home staff may not imply that embalming or sealing the casket will indefinitely preserve the remains.

If the funeral home adds a service fee to the price of cash advance items or receives a refund, discount, or rebate from the supplier, that information must be disclosed to the consumer.

The consumer has a right to purchase only the goods and services desired. A written statement of the goods and services selected that includes an explanation of any items required by law must be provided.

These disclosures serve to protect the consumer from unwanted purchases. They also aim to increase competition within the funeral home industry by providing consumers with the information needed to engage in comparison shopping.

The investigation of Connecticut funeral homes revealed high prices and incomplete compliance with the FTC’s Funeral Rule. It also discovered unintended consequences of the regulation that result in the consumer purchasing services that may not be needed.

When our volunteers visited funeral homes to inquire about the goods and services they offered, they found that the prices of caskets and vaults were indicated by ranges on the general price list. A separate list of casket prices was volunteered by only 38 % of the funeral homes, and that number climbed only to 69 % when one was requested. Similarly, only 38 % of the funeral homes volunteered a separate list of vault prices, and no more than 56 % of them produced it when requested. The FTC Funeral Rule requires that both lists be provided to the consumer.

All funeral homes indicated in writing that embalming is not required by law, except in special circumstances. However, 31 % of the funeral homes failed to mention the cheaper options of direct cremation or immediate burial, and 6 % actively discouraged the consumer from selecting those options.

When discussing the protective value of sealing the casket or the vault, 19 % of the funeral homes implied that the remains would be protected indefinitely. Although perhaps intended to provide the consumer with some emotional comfort, the statement is false, and some funeral homes tactfully emphasized that fact.

When our visits were complete, only 75% of the funeral homes provided the required statement of the goods and services selected. This leaves the consumer unable to effectively engage in comparison shopping.

Additionally, only 63 % of the funeral homes displayed all caskets for viewing. There were no prices displayed on the caskets in 13 % of the funeral homes.

The general price list, the heart of the FTC Funeral Rule, was volunteered by 94% of the funeral homes.

Perhaps most surprising was that, despite an itemized price list, consumers may still pay for unwanted services because the FTC’s Funeral Rule allows funeral homes to describe related services as a single item. Many general price lists combine cosmetology, hairdressing, reconstruction, dressing, and casketing "into the other preparation of the body" as a single item. Thus, the consumer pays the whole charge for other preparation even if dressing and casketing are the only services required.

Similarly, fees for the professional services of the funeral home’s staff include services that the consumer may wish to complete without the staff’s assistance. For example, consumers can easily arrange flower delivery, schedule a clergy member, prepare and place obituary notices, and file papers pertaining to cremation, burial, and transportation. However, charges for all these services and a proportionate charge of the funeral home’s overhead costs are included in a nondeclinable fee for the basic services of the funeral director and staff. In addition to the above findings related to the FTC’s Funeral Rule, our investigation revealed a wide range of prices for funeral goods and services. Our findings are summarized below:

Good or Service

Immediate Burial

Lowest Price: $725Highest Price: $2,635Connecticut Average: $1,393

Direct Cremation

Lowest Price: $725Highest Price: $2,255Connecticut Average: $1,556

Receiving Remains from Another Funeral Home

Lowest Price: $440Highest Price: $2,040Connecticut Average: $1,556

Forwarding Remains to Another Funeral Home

Lowest Price: $780Highest Price: $2,520Connecticut Average: $1,637

Basic Services of Funeral Director and Staff

Lowest Price: $700Highest Price: $1,775Connecticut Average: $1,205

Embalming

Lowest Price: $100Highest Price: $525Connecticut Average: $373

Visitation (On Site for at least 2 hours)

Lowest Price: $100Highest Price: $520Connecticut Average: $295

Visitation (off site for at least two hours -- only 4 funeral homes offered this)

As a result of this investigation, our single most urgent recommendation is that consumers set aside the taboo of discussing death and select the funeral goods and services they desire in advance. The wide ranges of prices indicate that consumers who take the time to engage in comparison shopping will be rewarded by lower costs.

Additionally, although some funeral homes may still advocate particular funeral arrangement packages, consumers should pay only for those goods and services they desire. The only exception to this is when a particular service is required by law, and in such circumstances the funeral home must provide a written explanation referring to the pertinent statute. Thus, we remind consumers that they may make many arrangements themselves and demand funeral homes deduct any fees for professional services that are not desired.

We also recommend that the FTC or the State of Connecticut strengthen the Funeral Rule. Funeral homes should also be required to:

display the least expensive casket available,

only be reimbursed at cost for cash advance items, prohibiting additional service charges,

separate the proportionate overhead costs of the funeral home from the basic professional services of the funeral director and staff on the general price list.

Part II

One option when making funeral arrangements in advance is to engage in a pre-paid contract with the funeral home. In this arrangement, the consumer selects the goods and services desired and sets aside a monetary amount equal to their current prices. The funeral home promises to use those funds to provide the selected goods and services upon the consumer’s death.

For consumers, there are many advantages. They are able to select the goods and services they want and save their loved ones from having to make such decisions at an emotionally difficult time. Individuals entering a nursing home under federal Title XIX are able to reduce their assets while ensuring they receive the funeral arrangements they desire. The contract may be revoked or transferred from one funeral home to another at any time.

However, there are also many possible abuses. The funeral home might choose to provide only some of the selected goods and services if inflation drives their prices above the funds set aside by the consumer. In turn, the funeral home might artificially raise prices at the time of death to ensure that it gains any interest the funds accrued. The funeral home directly or indirectly may receive some funds in return for recommending a particular financial institution in which to set aside the funds. The funeral home may embezzle the funds set aside and leave consumers or their families to pay a second time for their funeral arrangements.

Our investigation revealed that funeral homes do not readily discuss the details of pre-paid funeral arrangements. Funeral homes also offer limited options to consumers regarding the finances related to their pre-selected goods and services.

Nearly half of the funeral homes did not mention that pre-paid contracts were available. When the consumer inquired about them, we learned that the consumer may still learn little about this option. 13 % of the funeral homes failed to disclose that such contracts are revocable unless the consumer qualifies for federal Title XIX. A quarter of the funeral homes did not discuss the financial risk or expected rate of return for setting these funds aside.

None of the funeral homes disclosed what happens to any excess funds after the funeral goods and services have been provided. When the consumer inquired, 64 % of the funeral homes acknowledged that they return the excess funds to the consumer’s estate, as is required. The others simply keep the excess funds, exhaust them by providing additional services, or deliver them to a surviving relative.

Only a quarter of the funeral homes provided consumers with options regarding how the funds they set aside would be handled. Some funeral homes place the consumer’s money in an escrow account or purchase a CD in a local bank. Others encourage the consumer to purchase insurance from the Forethought Life Insurance Company. Many place the funds into a trust managed by the Interment Trust Service, which reinvests the consumer’s funds to cover its management expenses.

As a result of this investigation, we recommend that consumers take note of the fine print in pre-paid funeral contracts. Be sure the contract clearly stipulates what goods and services have been selected, whether those arrangements are guaranteed in their entirety regardless of inflation, and what happens to any excess funds.

The consumer also should consider setting aside the necessary funds as seriously as any other investment. The nature of the contract implies that the selected goods and services actually are paid for in advance. In reality, the consumer’s funds are entrusted to an escrow agent to be invested or managed until they are required to pay for the selected arrangements. Consumers should ask the same questions of the funeral home director and escrow agent that they would of a bank representative or financial advisor.

We also recommend that the FTC or the State of Connecticut expand the disclosure requirements of the Funeral Rule to include the realm of pre-paid funeral contracts. Funeral homes should be required to disclose:

existing requirements, such as that excess funds must be returned to the consumer’s estate,

that contracts are revocable or transferable

how to contact the escrow agent responsible for managing the consumer’s funds

Brought together by a common interest in protecting consumers from potential fraud by the funeral home industry in Connecticut, ConnPIRG and the State of Connecticut Attorney General conducted a survey of 16 randomly selected funeral homes. Volunteers familiar with the FTC Funeral Rule and potential risks of pre-paid funeral contracts visited the funeral homes and inquired about the goods and services they provided. They recorded what information was voluntarily disclosed and what was disclosed only when requested. They made note of or obtained in writing what options were available to them. The written materials they gathered and their notes provided the data for this analysis.